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Richardson Campaign Press Release - Governor Bill Richardson Proposes Fix to Foreclosure Crisis

December 03, 2007

Richardson also vows to protect families from abusive credit card practices

SIGOURNEY, IA-- New Mexico Governor and Democratic Presidential candidate Bill Richardson today unveiled his mortgage and credit markets policy in Keokuk County, Iowa. Iowa has had approximately 7,500 foreclosures in the past year.

"People are not looking for handouts, they are looking for honesty," Richardson said. "Americans are working hard and playing by the rules, but the rules do not work anymore. We must change them.

"When Congress passed harsh Bankruptcy 'Reform' in 2005, it left working families, children, and widows to deal with the worst practices of credit card companies and predatory lenders. We need a President who will be on the side of hardworking Americans facing foreclosures and financial disaster, not the financial industry."

In 2003, Richardson signed the Home Loan Protection Act in New Mexico. As a result, New Mexico has the lowest foreclosure rate in its region and one of the lowest in the country. Today Richardson proposed implementing that policy nationwide.

"Almost five years ago, we saw that the rules were wrong," Richardson said. "We saw that they protected big lenders, not the big dreams of hardworking Americans. We saw that they promoted unfair practices, so I did something about it."

Richardson also talked about fighting homelessness among our nation's veterans.

"It is absolutely unacceptable that one-third of the homeless on our streets are veterans," Richardson said. "We have to take serious and immediate steps to address this issue and honor those who have served our country. In New Mexico, I created the HERO program to help active-duty military members, teachers, police officers, fire fighters, and nurses buy their own homes."

As Governor, Bill Richardson:

  • Prohibited lending made without regard to one's ability to pay back the loan.
  • Prohibited the refinancing of a home loan when the loan provided no net tangible benefit to the borrower.
  • Restricted the fees and points charged for a home loan.
  • Limited late payment fees.

As President, Bill Richardson will:

  • Reform the bankruptcy laws to give primary housing residences the same status as vacation homes so that mortgages on people's actual homes can be restructured during bankruptcy.
    • This alone will prevent some 600,000 hardworking Americans from losing their homes in the coming months and years.
  • Prevent up to 1.75 million Americans from defaulting on their mortgages by enacting the FDIC's proposal for a temporary freeze of introductory rates on the most default-prone adjustable-rate loans.
  • Insist on transparency in the mortgage industry and build a firewall between credit-rating agencies and the companies that they rate.
  • Preserve our communities affected adversely by foreclosures. While fighting to prevent foreclosures, Richardson also will work with lenders who do have foreclosed properties to ensure that these properties are responsibly maintained and that our neighborhoods are protected.
  • Guarantee transparency in the credit card industry and all of its activities.
    • Insist on 'plain English' instructions for all credit card contracts. Users of credit should not need a PhD to understand what they are signing.
  • Prohibit retroactive higher interest rates on balances incurred before a rate increase went into effect.
  • Place limits on the interest rates that can be charged for medical debt and prevent credit agencies from downgrading credit scores due to medical debt.
    • Over one-third of working-age Americans have had trouble paying medical bills or have incurred medical debt in the last year, and medical expenses play a role in nearly half of all personal bankruptcies.

To read Governor Richardson's mortgage and credit markets policy, click here.

Bill Richardson, Richardson Campaign Press Release - Governor Bill Richardson Proposes Fix to Foreclosure Crisis Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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